Total health spending in Canada to reach $228B in 2016: report

Staff | December 21, 2016

This year, Canadian health spending will increase by 2.1 per cent, the Canadian Institute for Health Information predicts.

The amount, which includes public, insurer and individual spending, totals $228 billion, or 11.1 per cent of the country’s gross domestic product, and varies by geography. In Newfoundland and Labrador, for instance, the per capita cost is $7,256, while in Quebec, it’s just $5,822. The average across all provinces and territories is $6,299.

“The slow economic conditions Canada has experienced this decade have contributed to slower growth in health spending,” said Michael Hunt, CIHI’s director of health spending and strategic initiatives, in a release. “With population growth, an aging population and continuing health-sector inflation, the sustainability of Canada’s modest rate of growth in health spending remains an issue to monitor. Health-care dollars need to be spent strategically to meet increasing demands on Canada’s systems.”

Sixty-five per cent of spending will come from provincial and territorial governments, the report notes, while five per cent will come from municipal governments, directly from the federal government, social security funds and other public funds. Twelve per cent will be paid for by private insurers, 15 per cent by individuals and three per cent by other sources.

In 2014, out-of-pocket expenditures reached $868 per person, and private insurer expenditures reached $734 per person, according to the report.

The largest categories of spending are hospitals (29.5 per cent), drugs (16 per cent) and physician services (15.3 per cent). A further 39 per cent includes other goods and services, such as vision care, dental services, paramedicals, research and public health.

While more than 90 per cent of hospital and physician fees are paid for by public funds, a greater proportion of costs for drugs (63.8 per cent) and services from non-physician health professionals (91.3 per cent) are paid for by private insurers and individuals.

While overall spending on health care is only seeing a modest rise, spending on public drug programs increased 9.2 per cent from 2014 to 2015, according to the report, which notes most of that stems from new, expensive drugs that treat hepatitis C but other medications still account for a 3.6 per cent increase.

This can be tied to patent expirations and generic pricing policies having less of an effect than in previous years, said Hunt. “While the savings achieved persist, they are no longer leading to significant reductions in year-over-year growth.”